Upgrade or Downgrade? 12 Ways to Increase Your Home Value (and 12 to Avoid)
Many things can shape property values over time. It’s interesting to see how these factors can really change a home’s market price.
Recent research shows that just 52% of a property’s value comes from the house itself. The other 48%? That comes from the area around it. Almost half of a home’s worth isn’t about the building at all!
This matters to everyone in real estate. Homeowners need this info to make smart choices about upgrades and upkeep. Buyers rely on it to make better investments.
In this guide, I’ll show you 12 things that boost your property value and 12 things that hurt it. This knowledge will help you protect and grow your property’s worth no matter what’s happening in the market.
Do you agree with our list? Did we miss any? Let us know in the comments!
Things That Increase Property Value
Your home’s value isn’t set in stone. Many factors can boost its worth, some of which you can control and others that are part of your property’s inherent characteristics.
Here are 12 key elements that can significantly increase your property’s value:
Location & Neighborhood
The old saying “location, location, location” remains true in real estate. Properties in desirable neighborhoods with good schools, low crime rates, and plenty of amenities tend to appreciate faster.
Proximity to public transportation and parks also makes a home more attractive. A prime location can often outweigh other factors, making it one of the most critical aspects of a property’s value.
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Updated Bathrooms
Today’s bathrooms grab buyers’ attention like nothing else. Easy upgrades such as fresh fixtures, better lighting, and premium materials boost both comfort and looks.
A smartly designed bathroom brings a spa feeling right into your home, making daily routines feel luxurious. Small tweaks like swapping out an aging vanity or putting down new tile can dramatically improve your bathroom’s charm while lifting your entire home’s worth.
Upgraded Kitchen
The kitchen stands as the true center of any home, with a modern, practical kitchen making your whole house more attractive to buyers. You don’t need to completely redo it to see results.
Basic upgrades like fresh countertops, new appliances, or creating an open space can bring excellent value for your money. A smartly designed kitchen often becomes the main selling feature and can greatly increase your home’s total worth.
Curb Appeal & Landscaping
First impressions matter immensely in real estate. A well-maintained exterior and appealing landscaping make a home more attractive to potential buyers, increasing its overall value.
Research found that curb appeal can account for up to 7% of a home’s value when sold. This includes everything from maintaining a manicured lawn to adding attractive plants and ensuring the exterior paint is in good condition.
Energy Efficiency Upgrades
Energy-smart homes catch the eye of eco-minded buyers while cutting down on utility bills. Adding solar panels, double-glazed windows, and efficient heating/cooling systems makes your home more desirable.
These improvements boost your home’s value and save money over time. Buyers view these upgrades as smart investments that lower future costs while helping the planet.
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Additional Living Space
Expanding a home’s usable square footage, such as adding a bedroom, bathroom, or finishing a basement, boosts its market value. Additional living areas make homes more versatile for different family sizes.
This could mean converting an attic into a bedroom, finishing a basement to create a family room, or even adding an extension to the house. More space often translates to higher value in the real estate market.
Smart Home Technology
The integration of smart home features like thermostats, security systems, and lighting can enhance a home’s appeal offering convenience and energy efficiency. These technologies make daily life easier and often provide additional security.
Potential buyers, especially younger ones, increasingly see smart home features as desirable additions that justify a higher price point.
Garage or Off-Street Parking
In urban and suburban areas, parking can be a crucial selling point. A garage or driveway increases the practical value of a home, especially in densely populated neighborhoods.
This amenity offers convenience and security for vehicles, which is highly valued by many homeowners. In areas where street parking is limited, off-street parking can significantly boost a property’s desirability and value.
Fresh Paint & New Flooring
A simple yet effective way to freshen up a property is through new paint and flooring. Neutral tones and modern flooring choices like hardwood can make a home feel newer and more inviting.
These updates can transform the look and feel of a space, making it more appealing to potential buyers. Fresh paint and new flooring also signal to buyers that the home has been well-maintained, which can increase their confidence in the property.
Permits for Renovations
Having proper permits for home renovations ensures that any improvements are up to code, which can boost a home’s value. Buyers feel more confident when major work has been done legally and correctly.
This documentation provides peace of mind and can prevent future legal issues. It also demonstrates that the renovations were done thoughtfully and with attention to detail, which can justify a higher asking price.
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Privacy Features
Buyers often seek privacy, especially in suburban and rural areas. Features like tall fences, privacy landscaping (like hedges), and soundproof windows enhance the feeling of seclusion and can boost a home’s appeal.
In an increasingly connected world, the ability to retreat to a private space is highly valued. These features can transform a property into a personal oasis, making it stand out in the market.
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Updated Amenities
Homes with modern, high-end amenities like a home gym, spa-like bathrooms, or outdoor kitchens are increasingly desirable. These luxury upgrades often attract buyers willing to pay a premium.
Such features can make daily life more enjoyable and convenient, adding significant value to a property. They also help a home stand out in a competitive market, potentially leading to faster sales at higher prices.
Things That Lower Property Value
While many factors can boost your property’s value, it’s equally important to be aware of elements that might decrease it. Understanding these potential pitfalls can help you make informed decisions about your property and avoid unnecessary depreciation.
Let’s examine 12 key factors that can negatively impact your property’s value:
Bad Location
Location remains one of the biggest factors influencing a home’s worth, and unfortunately, a bad one can significantly decrease property value. Areas with high crime rates, poor schools, or proximity to undesirable facilities often see property values decline over time.
One study found that a 10% increase in violent crimes reduced property values in a neighborhood 6%. This underscores the importance of researching an area thoroughly before purchasing a property.
Deferred Maintenance
Homes that exhibit signs of neglect, such as broken appliances, leaky roofs, or foundation problems, will see their value drop. Buyers tend to avoid properties that require significant repairs or upgrades, as these represent additional costs and potential headaches.
Regular maintenance is crucial for preserving your home’s value. Ignoring small issues can lead to larger, more expensive problems down the line, ultimately impacting your property’s worth.
Poor Curb Appeal
Homes with peeling paint, overgrown lawns, or broken fences often leave a negative first impression. Properties that lack curb appeal can be harder to sell and may attract lower offers.
According to the National Association of Realtors, property values can fall 30% due to poor landscaping alone. This statistic highlights the importance of maintaining your home’s exterior and creating an inviting first impression for potential buyers.
Over-Personalized Décor
Unique or highly personal design choices (like bold colors or themed rooms) can make it harder for buyers to envision themselves in the home. Neutral, broadly appealing décor helps homes sell faster and often for higher prices.
While your leopard-print wallpaper or sports team-themed man cave might be perfect for you, potential buyers might see these as projects they’ll need to undo. Keeping your home’s décor relatively neutral can help maintain its broad appeal and value.
Unpleasant Odors
Bad smells from pets, cigarette smoke, or mold can be an instant turn-off for buyers. Lingering odors may signal deeper problems like poor ventilation or water damage, further lowering the property’s value.
These odors can be particularly problematic because they’re often noticeable as soon as a potential buyer enters the home. Addressing the source of unpleasant smells and ensuring good ventilation throughout your home can help maintain its value.
Pest Infestations
Termites, rodents, and other unwanted critters suggest serious structural damage that potential buyers run from. Getting rid of these pests costs a lot, bringing down what you can sell your home for.
Keep pests away with consistent prevention and tackle any problems right away to protect your home’s value. Smart homeowners get pest inspections before listing their property
Nearby Foreclosures
A high number of foreclosures in the area can negatively affect property values, as they suggest economic instability. This reduces buyer confidence and demand in the area.
While you can’t control your neighbors’ financial situations, being aware of this factor can help you make informed decisions about when to sell or buy a property. In some cases, it might be worth waiting for the local market to stabilize before listing your home.
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Outdated or Poor Quality Renovations
Bad DIY jobs and old-fashioned updates can scare off potential buyers. Shoddy work and cheap materials make homes less attractive and harder to sell. Good renovations boost your home’s value, but bad ones can actually lower it.
Put your money into top-notch materials and expert workers for your home projects. This approach helps ensure your improvements actually add value to your property instead of reducing it.
Functional Obsolescence
Homes with outdated layouts, such as tiny bedrooms, small closets, or a lack of open space, may be less desirable to modern buyers. This can lead to a lower sale price compared to more modern homes.
While some aspects of functional obsolescence can be addressed through renovations, others might be inherent to the home’s original design. Understanding your home’s limitations can help you set realistic expectations about its value.
Excessive Noise
Proximity to busy roads, airports, or train tracks can significantly detract a home’s appeal due to noise pollution. This often discourages potential buyers and can lower property value.
While you can’t move your house away from noisy areas, you can take steps to mitigate the impact. Installing soundproof windows or creating barriers with landscaping can help reduce noise and potentially preserve your home’s value.
Legal Issues or Liens
Properties that have unresolved legal disputes, liens, or title issues can scare off potential buyers and significantly reduce value. These complications make it difficult to transfer ownership smoothly.
It’s crucial to resolve any legal issues or liens before putting your property on the market. A clear title and absence of legal complications can help maintain your home’s value and make it more attractive to potential buyers.
High Property Taxes
Homes in areas with unusually high property taxes can be less attractive to buyers, as they increase the long-term cost of homeownership. Buyers may opt for homes in areas with more favorable tax rates.
While you can’t control local tax rates, being aware of how your area’s property taxes compare to neighboring communities can help you understand your home’s relative value in the market.
In some cases, challenging an assessment might help keep your property taxes more in line with the local average.
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The Bottom Line on Property Value
Understanding these property value factors empowers you to make smart real estate decisions. Focus on enhancing positive elements within your control, like maintaining your home and making strategic upgrades.
Stay aware of external influences, such as neighborhood trends or local economic conditions. Regular maintenance prevents costly issues down the line. When buying, consider not just the house, but its surroundings and potential for appreciation.
With the right approach, you can enjoy your home to the fullest while also setting yourself up for success when it’s time to sell.
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AI was used for light editing, formatting, and readability. But a human (me!) wrote and edited this.
